SumanSpeaks Capital Markets & Geopolitical Intelligence  •  Estd 2006

Equity Research  •  PSU / Steel

NMDC Steel Finally Turns the Corner —
From Project-in-Progress to ₹58.72 Crore of Profit

FY26 revenue jumped 60% to ₹13,642 crore, Q4 profit swung to ₹392 crore from a ₹473 crore loss, and borrowings are down to ₹4,602 crore. The stock, though, has cooled to ₹43–44 — well off its post-results high near ₹52.60.

Long-time readers of this blog will recall the "Steeling for Success" call on NMDC Ltd (₹43.15) Steel back in November 2024, when the stock traded near ₹47 and the turnaround was still a thesis, not a fact. Through FY25 that thesis remained under construction — revenue grew fast, but the bottom line stayed deep in the red. FY26 is the year the numbers finally caught up with the narrative.

1	The Numbers That Matter

NMDC Steel closed FY26 with a net profit of ₹58.72 crore, reversing a net loss of ₹2,373.78 crore in FY25. Full-year revenue from operations climbed 60.4% to ₹13,641.81 crore from ₹8,503.05 crore. The improvement was led by an exceptional Q4: net profit of ₹391.91 crore against a loss of ₹473.39 crore a year earlier, on revenue up 36.7% to ₹3,879 crore — the company's best-ever quarterly print. Operating margins expanded to roughly 20.8% in Q4 from a negative 10.2% in the year-ago quarter, and EPS moved to ₹0.20 for the year versus a loss of ₹8.10 in FY25.

A company doesn't cross from ₹2,374 crore of losses to ₹59 crore of profit by accident — it does so when a capex-heavy project finally starts behaving like an operating asset.

2	Nagarnar Ramps Toward Rated Capacity

The entire turnaround is anchored in one asset: the 3 MTPA integrated steel plant at Nagarnar, Chhattisgarh, built at a cost of roughly ₹24,000 crore. The company has now reached average capacity utilisation of about 80% of rated capacity, just two years after commissioning — a milestone management flagged alongside the results. FY26 annual production came in at a record 23.25 lakh tonnes and sales at 24.55 lakh tonnes, up 62% and 74% respectively over FY25. That kind of volume growth is what converts a fixed-cost-heavy steel plant from a cash drain into a margin engine.

3	Deleveraging Is Doing Real Work

Alongside the operational scale-up, the balance sheet has been actively repaired. Total borrowings fell to ₹4,602 crore from ₹5,898 crore, and the company fully redeemed its outstanding Non-Convertible Debentures worth ₹523.80 crore — taking NCD debt to zero. Annual finance costs dropped to ₹486.64 crore from ₹651.94 crore. For a business that spent years being strangled by interest costs on a capital-intensive project, that reduction flows almost directly into the bottom line.

NMDC Steel also retains a structural cost edge most standalone steelmakers don't have: captive-linked iron ore supply from parent NMDC's Bailadila mines, roughly 100 km from Nagarnar, which insulates it from spot-market ore price swings and keeps input costs competitive.

Case File: NMDC Steel Ltd (NSE: NSLNISP)

CMP (as of 16 Jul 2026)	≈ ₹43.15
52-week range	₹33.01 – ₹53.75
Market Cap	≈ ₹12,600 Cr
FY26 Net Profit	₹58.72 Cr (vs loss ₹2,373.78 Cr FY25)
FY26 Revenue	₹13,641.81 Cr (+60.4% YoY)
Q4FY26 Net Profit	₹391.91 Cr (vs loss ₹473.39 Cr YoY)
Q4FY26 Revenue	₹3,879 Cr (+36.7% YoY)
Total Borrowings	₹4,602 Cr (from ₹5,898 Cr)
FY26 EPS	₹0.20 (vs loss ₹8.10 FY25)
Capacity Utilisation	≈ 80% of rated 3 MTPA

Board & Governance Note

The Ministry of Steel appointed Shri Vivek Nishant Nath as Director (Commercial) effective from a July 14, 2026 order, a role co-terminus with his position at parent NMDC. Separately, statutory auditors flagged that the company does not currently meet the required number of independent directors under the Companies Act and listing norms, with appointments stated to be pending from the Central Government — a compliance gap worth tracking given NMDC Steel's PSU governance structure and periodic disinvestment chatter.

4	What Could Still Go Wrong

The turnaround doesn't erase near-term risk. A global steel supply overhang, worsened by cheap imports from neighbouring countries, is pressuring domestic HRC and rebar realisations heading into Q1 FY27. The monsoon season typically softens construction-linked dispatches, and elevated coking coal import costs continue to squeeze gross margins even for well-run domestic mills. India's safeguard duties offer some cushion, and brokerages including Nomura remain constructive on the sector, expecting sequential EBITDA gains as earlier price corrections work through the books — but none of that guarantees Q4 FY26's margin profile repeats every quarter.

Already Priced In The FY26 turnaround itself — the stock rallied 13.5%+ on results day and has since cooled from its post-results high.

Not Yet Proven Whether 20%+ operating margins hold through a monsoon-softened, import-pressured Q1 FY27, and whether utilisation pushes meaningfully past 80%.

5	The Bottom Line

NMDC Steel has done what it set out to do: it converted a ₹24,000 crore capex bet and years of losses into a genuinely profitable, deleveraging steel business within two years of full commissioning. That's not an accounting quirk — it's a company that has earned its way out of the project stage and into the operating column.

This article is published by SumanSpeaks (sumanspeaks.blogspot.com) for general informational and educational purposes only. The author has over 25 years of capital markets experience. This is not a recommendation to buy, sell, or hold any security. Steel realisations and PSU disinvestment timelines can shift the assumptions discussed above with little notice. All data is sourced from public exchange filings, regulatory orders, and credible financial media. Readers must conduct independent due diligence before making any investment decision.

For personalized stock market insights and guidance, feel free to reach out at: sumanm2007s@gmail.com | suman2005s@rediffmail.com